Mmpottery on wed 18 mar 98
I was just thinking about this and wondered what some of you might say to
someone that asks for a discount on, say 100 pieces. Do they think this is
like buying 100 cases of beer or what? What would be a good (polite) way of
explaining that it is NOT the same thing. Thanks for your input! Michelle
Gavin Stairs on thu 19 mar 98
Hi Michelle,
The way to think about quantity discounts is simply to figure out what it
is worth to you to have a sale of such a quantity all done up with a bow.
First, how much work does it save you? How much does each sale cost you,
one at a time? How much do you expect the bulk sale to cost you? Multiply
the former by the number in the bulk sale, and subtract the latter, and you
have the extra value to you of the bulk order. Now decide how much of that
you want to give back to the customer.
Consider this:
1 mug at a time
cost of clay $1.00
cost of glaze 1.00
cost of time to make 5.00
cost of sales effort 5.00
overhead 2.00
-------------------------------
cost of mug 14.00
This is the cost of a mug at wholesale. Your profit is in the time charges.
100 mugs at a time 100 mugs per mug
cost of clay $100.00 $1.00
cost of glaze 100.00 1.00
cost of time to make 500.00 5.00
cost of sales effort 50.00 0.50
overhead 100.00 1.00
--------------------------------------------
cost of 100 mugs $850.00 $8.50
The difference is $5.50 per mug, or $550/100. You could offer a 20%
discount and still be ahead of the game, spending more time at the wheel
and kiln and less doing sales.
The numbers above are for example only: you must make your own estimates of
the cost of things. In your own case it might not turn out to be nearly as
advantageous. Perhaps you should include an estimate of the additional
risk of the large sale.
This of course supposes that you want to make 100 or 500 mugs or bowls in
the first place. Not everyone does. However, potters who make production
ware for a living should not dismiss such questions without at least
considering for a moment. An attractive price might stimulate repeat
orders. For some, this might make the difference between steady sales and
a marginal existence.
Gavin
At 09:03 AM 3/18/98 EST, you wrote:
>----------------------------Original message----------------------------
> I was just thinking about this and wondered what some of you might say to
>someone that asks for a discount on, say 100 pieces. Do they think this is
>like buying 100 cases of beer or what? What would be a good (polite) way of
>explaining that it is NOT the same thing. Thanks for your input! Michelle
>
>
John H. Rodgers on thu 19 mar 98
-- [ From: John H. Rodgers * EMC.Ver #2.5.02 ] --
Michelle, I have given quantity discounts on items, but usually limit it to
items that can be exactly reproduced in large numbers. Before I give a
quantity discount, I run a break-even analysis on the item to see how many
units I have to make before I start to make money. There are always bottom
limits, below which you will not make a profit. Your wage and profit are two
very different things. It is important to keep in mind that the break-even
includes your wage, and the profit is the part you make above and beyond ALL
expenses(your wage included) that allows you to re-invest in your business,
say to buy that extra wheel, or get that new kiln you want, or go to a
certain work-shop to increase your professional education. Getting a handle
on this requires a lot of thought, but is extremely important to success. I
have seen to many artists give a way the farm just to get the sale, and in
the long haul lose money, not make money.
John Rodgers
In Alabama
-------- REPLY, Original message follows --------
Date: Wednesday, 18-Mar-98 09:03 AM
From: Michelle McCurdy \ America On-Line: (Mmpottery)
To: Clayart \ Internet: (clayart@lsv.uky.edu)
Subject: QUANTITY DISCOUNTS?
----------------------------Original message----------------------------
I was just thinking about this and wondered what some of you might say to
someone that asks for a discount on, say 100 pieces. Do they think this is
like buying 100 cases of beer or what? What would be a good (polite) way of
explaining that it is NOT the same thing. Thanks for your input! Michelle
-------- REPLY, End of original message --------
Cindy on thu 19 mar 98
Michelle,
This is what I do about discounts. Anyone who places an order of $350 or
more is considered a wholesale customer. They get 50%. Maybe that's not
wise, but I do see some value in this practice. If I have an order for
$500, I can stay at home and make that order. I don't have to go out and
sell, which I really don't like to do anyway. Selling takes up a lot of my
time--time I would rather use to make pottery . . . or have a picnic . . .
or soak in the bathtub . . . well, you get the idea.
If a wholesale customer asks for a further discount, I believe I will
simply explain that I am a one-person pottery and that making so many of
one item is hard on me to begin with. I might explain that I don't usually
take such large orders for a single item since I don't like doing them,
however, since they are one of my best customers, I will do it for them
this once. So far, even my largest ordering customers have not asked
for a further discount over wholesale, so maybe I'll never get the chance
to see if the above makes them happy. ;) Hope this helps.
Cindy Strnad
Earthen Vessels
Custer, SD
USA http://blackhills-info.com/a/cindys/menu.htm
Tim Stowell on thu 19 mar 98
We have some very excellent who in the past have asked for a discount.
They have brought me lots of customers and always paid upon delivery.
Sometimes I do give them a discount...10-15%..They have brought me enough
business that the little discount I give makes them happy and I'm happy
for the business..If they have ordered something specific which I will
have to make a few extra pieces anyway I will often through in the extra
piece if everything comes out great, what was I going to do with the
extra bowl anyway. The trick is to not give them the discount every time
and come up with a reason...we just had a fantastic show...filled a large
order...in a really good mood for some reason...etc
As for people who aren't already good customers the answer is simple.
Sorry, just can't afford to...we already price our work very reasonably.
Tim
Tim Stowell Gerard Stowell Pottery
Stacey Gerard 290 River Street
tstwll@juno.com Troy, NY 12180
(518)272-0983 www.trytroy.org/gerard/
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JLHclay on fri 20 mar 98
And in response to large commissions of mugs for example: Important point to
consider Will you be able to market the extras or are they specialized, a
decal or so thus making the extras a studio loss. Giving a discount to large
sales of finished works already in my inventory makes more sense to me than a
custom order.
jlhclay
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